We get asked (challenged might be a better term) by non-marketing folks, such as CEO’s and CFO’s in B2B environments, how to measure ROI for a company brand. Why bother with brand? How’s it make us money? Why the heck should anyone invest in brand building in this lousy economy? Especially a B2B company?

Fair questions.  Think brands don’t have prescribed value?

Top brands are worth millions.

In a bidding war and negotiation in 1998, Volkswagen paid $780 million for Rolls-Royce Motor Cars. But BMW got the Rolls-Royce brand name and logo for $66 million. According to the New York Times, analysts “quickly declared BMW the real winner of the takeover brawl because the name is considered by many to be Rolls-Royce’s most valuable asset.”

Or billions.
The 2008 BusinessWeek/Interbrand Best Global Brands ranking, created by BusinessWeek and Interbrand, ranks the top 100 global brands, and is typically published every September.

How are rankings determined? Interbrand says it evaluates brand value “in the same way any other corporate asset is valued — on the basis of how much it is likely to earn for the company in the future.” Interbrand uses “a combination of analysts’ projections, company financial documents, and its own qualitative and quantitative analysis to arrive at a net present value of those earnings.” Interestingly, Interbrand adds that brand values are “based on data collected during the 12 months prior to June 30, 2008. This means that more recent developments, including the troubles at Merrill Lynch and AIG, are not factored into the brand valuations.
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Top 10 Global Brands in 2009

1. Coca Cola $69 billion
2. IBM $60 billion
3. Microsoft $57 billion
4. GE $48 billion
5. Nokia $35 billion
6. McDonald’s $32 billion
7. Google $32 billion
8. Toyota $31 billion
9. Intel $31 billion
10. Disney $28 billion

(In a competing ranking, The 2009 Millward Brown “BrandZ Top 100 Most Valuable Global Brands” Google is ranked #1 in the world with a brand value of $100 billion – yes billion.)

Note that 5 of the top 10, Microsoft, IBM, GE, Intel, and Google derive much of their revenue in B2B sectors. And in many countries, particularly those with UK legacy, these brand assets are accounted for on company balance sheets.

Check out the entire top 100 brands here.

Brand studies have determined the following:
• 25% say price does not matter if they are buying a brand that has their loyalty.  And 72% of buyers will pay a 20% premium for their brand of choice. We buy everything Apple around our office even if the prices are ridiculous, and they are ridiculous for pedestrian items like power cords and adapters.

• 50% of customers will try a new product if it comes from a brand they have favor with. Amazon and Google and Apple and Microsoft reap extraordinary business from this phenomenon.

• Loyalty drives repeat business: P&G says it derives an average several thousand dollars of lifetime revenue from each of its customers, Think of fierce auto loyalty in many families. Why do you think GM held onto such dowdy cars for so long? Old biddies and old geezers bought Buicks and Oldsmobiles and when their little boys and girls grew up to be old biddies and old geezers, they also bought Buicks and Oldsmobiles.

• Strong brands deliver greater shareholder value and returns. A 2007 study conducted by Communications Consulting Worldwide (CCW) shows the correlation between your company and brand reputations and your market value, growth, stock price, etc. The chart below shows the potential impact for several companies.

• And not least, customers forgive strong brands. When Martha Stewart got out of the slammer her brand was actually buttressed.

Convinced? Or not. Comment here.